Robert Mullins
San Jose Business Journal
August 2, 2004

A Portland-based company is seeking to help small-business owners track their rewards from using credit cards to pay their bills.

If a consumer can get a free airline ticket after charging $25,000 on a credit card, imagine how much a business can earn by charging $100,000.

Credit card issuers have been encouraging small businesses to put their expenses on their credit cards -- anything from paying vendors to paying the light bill -- to earn rewards for other expenses, reduce overhead and improve profitability.

But paying expenses with credit card rewards only makes sense if you pay off your balance every month. Small-business advisers caution against overusing credit cards because interest charges may cost more than the value of that free airline ticket.

But if credit is used wisely, the points programs can improve the bottom line, said Joe Graziano, chief executive officer and co-founder of Zevez Corp.

"Points are the greatest currency in the U.S., after dollars," said Graziano, who started his company last year in Portland. "But you have to pay your cards off in 30 days," he adds. "We help clients to pay their bills on time."

Zevez has opened a San Jose, Calif., office and plans to open several more in the West.

Depending on the size of the business, Zevez charges from $500 to $2,500 to set up a credit card rewards tracking system. Zevez also collects a fee of one-half a percent of the client's charges each month. Zevez helps a company decide which cards to acquire based on the rewards offered, tracks the rewards accumulated on each card, advises which rewards to redeem and calculates how the rewards improve the bottom line.

Graziano claims rewards can improve the bottom line by as much as 10 percent. If a company has $2 million in sales, and a 10 percent gross profit margin, rewards can improve profitability by another $20,000.

Rewards could fly a sales representative to Miami for free to make another sale, for example. Rewards for hotels and car rentals can further reduce the travel budget, or can be handed out as employee bonuses.

"It makes your accounts payable a profit center instead of an expense center," he said.

Graziano founded Zevez after using credit card rewards to run his own Graziano Produce Co., which delivered fresh produce to fast food restaurants. He was surprised to find how many vendors took credit cards and quickly accumulated up to 150,000 points a year, eventually collecting nearly 2 million.

Then Graziano sold his company in 2000 to Del Monte Corp.

"When I sold Graziano Produce, the miles stopped coming in and I had withdrawal," he said.

Now he uses points to run Zevez, which has 40 employees and 30 accounts, mostly small- to medium-sized businesses.

But many card issuers offer small businesses the same management services as Zevez, without any extra charge.

American Express Co., of New York City, includes its small-business service in a bundle of other services called Open: The Small Business Network from American Express. It also offers rewards and provides account management. Visa U.S.A., of San Francisco, in January began offering its Visa Extras for Small Business, with similar benefits as well as account management.

But they only help clients compare which rewards card is best from among their own card brands, says a Zevez spokeswoman, not from among all brands.

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